Threat, risk

1

• Threat, risk
• (organised) crime and
• Crime-money (laundering)

2
Past, present and OC threat/risks

• 2001 European Multidisciplinary Group declared
• We looked back we must look forward!
• ? Therefore Future oriented reporting the
  future of OC the future of its threat/risk
• What is threat or risk?
• And what is an organised crime risk?

3
The simple risk formula

• Risk p ?xi/N (per time unit) threat
• the likelihood that an event x of a certain class
  Y will occur given the total set of events.
• Could policy makers please substitute the x and
  Y?
• Y is a closed definition of a class of events
• x single event of class Y
• ?xi-time time series of events
• Apply that to organised crime assessment

4
Finding an insurance policy againstorganised
crime

• Basic thesis every determinable harm can be
  insured if a likelihood can be determined.
• What does an insurance firm do with a new risk?
• (a) it determines the meaning of the class of
  events Y, then its total N
• (b) it designs a time series past events x
• (c) the costs of events (classified harm) and
  fills the formula

5
Finding an insurance policy againstorganises
crime continued

• What did the EU policy makers do?
• (a) they formulated a fuzzy definition and
• (b) threw away the past.
• Just try to make a time series.
• What can an insurance firm do?

6
The desperate insurance firm

• What can an insurance firm do?
• It cannot sell an OC insurance policy because
  there is no determinable risk! (Or serious
  crime) no x and no Y
• On what basis to assess OC crime risk?
• If no proper definition, no OC insurance risk
• Only con men can sell such policies!

7
The desperate insurance firm (continued)

• Are policy makers con men?
• They sold you multi-million policies
• ? EUROPOL
• ? Organised Crime Threat Assessments
• ? Transnational Organised Crime Convention
• ? Anti-money laundering regime
• All to make us feel secure!

8
The insurance firm perseveres!!

• Continue with our insurance man. What can he do?
• He must keep the OC banner excellent commercial
  label
• ? never abandon a winning formula!
• Next some correlation with a criterion variable.

9
The insurance firm perseveres!!(continued)

• For example
• Breakdown of social-economic or criminal
  variables against criterion variable Foreign
  direct investment
• (Daniele and Marani Italy)
• OC and investment negative correlation but ?
  causal relation, because
• Underlying variable mal governance and
  corruption.

10
The unmarketable exception clause

• The underlying variable mal governance and
  corruption.
• The Berlusconi exception clause!
• How to sell such an insurance product?
• Determining the threat of mal governance and sell
  corruption risk policies.
• Commercial challenge for Transparency
  International,
• but otherwise unsalable.

11
The threat of crime money

• The global threat since the 1980s.
• Basic concern threat to the financial system ?
  integrity
• Which criminal is going to cut the branch on
  which he is sitting?
• Grubby banks are dangerous . . . . for
  launderers

12
The threat of crime money (continued)

• ? Calvi hanging from Black Friars Bridge
• ? Sindona (poison) lawyer shot
• ? Russian bankers (a too long series for a
  slide)
• ? Nugan Hand Bank (Australia, suspicious
  suicide)
• ? European Union Bank ( 10 million lost)
• Most recent launderers risk unreliable bank
  employees selling CDs with names to the fiscal
  authorities!

13
The criminal risk industry

• Instead of threat thinking
• The real question What is the role of crime
  money within the financial system?
• Again no data, but an abundance of threat images
  benefiting the compliance industry.
• Lot of juggling with trillions by IMF, OEDC,
  World Bank, FATF mutually copy-pasting figures
  and threats
• A (financial) risk industry

14
Copy-pasting threats

• Affects currency movements
• Destabilises banks by sudden withdrawals
• Influences interest rate.
• Distorts the GDP.
• No optimal investment
• (remarked by Ponzi-bankers!)

15
The risk of laundered and unlaundered money

• What is the harm of laundered money?
• ? Part of the GDP where is the danger?
• ? Taxable
• But there is moral harm crime should not pay ?
  corrosion of morals

16
The risk of crime-money and corruption

• More corruption?
• All big corruption scandals in EU concerned white
  money!
• Unlaundered money ? What is the threat?
• Luxury lifestyle? What is the difference with our
  greedy irresponsible Ponzi-bankers?
• If laundered properly, no longer a threat!

17
The role of crime moneyon-going research

• The Dutch confiscation database statistical mud
  track since 1994
• Threatened sector real estate skewed division
  but
• Mean 182.000 / median 150.000
• mean value bank account 263.000 / median
  20.000
• ? 100.000 90
• ? 1.000.000 11
• ? 94 Dutch bank accounts lt 100.000
• The role of crime money
• less prominent, certainly not threatening,
  unless falsified by better data!

18
Do what you are (hopefully) paid for

• Falsify, falsify, falsify, until the hypothesis
  do not crack.
• Identify your risk counting unit no risk
  assessment without ?xi-n/time
• Get to your database owners and hold them
  accountable
• they are your (democratic) knowledge source.

19
Thou should not hide knowledge

• We are the people, researchers too,
• And have the right to know.
• If no data access sue them under your Freedom of
  Information Act
• If you dont dare, just join the collective risk
  assessment ritual dance of the conferences.